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Marcuzzo v. Bank of the West

Supreme Court of Nebraska

May 1, 2015

BRIAN MARCUZZO AND DONNA MARCUZZO, APPELLANTS,
v.
BANK OF THE WEST ET AL., APPELLEES

As Corrected May 19, 2015.

Page 282

[Copyrighted Material Omitted]

Page 283

Appeal from the District Court for Sarpy County: MAX KELCH, Judge.

Douglas W. Ruge for appellants.

Ryan K. Forrest, of Kozeny & McCubbin, L.C., for appellee Erika Knapstein.

Jennifer L. Andrews and Alison M. Gutierrez, of Kutak Rock, L.L.P., for appellees Wells Fargo Bank, N.A., and Federal National Mortgage Association.

HEAVICAN, C.J., WRIGHT, CONNOLLY, MCCORMACK, AND CASSEL, JJ. Stephanand Miller-Lerman, JJ., not participating.

OPINION

Page 284

[290 Neb. 810] McCormack, J.

NATURE OF CASE

Brian Marcuzzo and Donna Marcuzzo asserted causes of action against Wells Fargo Bank, N.A. (Wells Fargo), the Federal National Mortgage Association (Fannie Mae), Erika Knapstein, Bank of the West, and Jeff T. Courtney (collectively the defendants), relating to the foreclosure and subsequent sale of their residence. All causes of action are premised on [290 Neb. 811] the assertion that the assignment of the Marcuzzos' mortgage was improper. The district court granted summary judgment to Wells Fargo, Fannie Mae, and Knapstein, and dismissed Bank of the West and Courtney. The Marcuzzos appeal.

BACKGROUND

The Marcuzzos asserted six causes of action against the defendants. All causes of action arose out of the sale of the Marcuzzos' residence, pledged as collateral for a mortgage loan on which the Marcuzzos defaulted. Actions for quiet title, declaratory judgment, and injunctive relief were asserted against all of the defendants. The Marcuzzos sought actions for accounting, conversion, and slander of title against Wells Fargo. The Marcuzzos sought an action for wrongful foreclosure against Wells Fargo, Fannie Mae, and Knapstein, the successor trustee of the deed of trust. In the district court, the actions against Wells Fargo, Fannie Mae, and Knapstein were dismissed in summary judgment and the remaining causes against Bank of the West and Courtney were dismissed for failure to prosecute. The Marcuzzos appeal.

Mortgage Documents

On February 6, 2004, the Marcuzzos executed and delivered a promissory note in the principal amount of $214,949 to Advantage

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Mortgage Service, Inc. (Advantage Mortgage). To secure payment of the note, the Marcuzzos executed and delivered a deed of trust to Mortgage Electronic Registration Systems, Inc. (MERS). The deed of trust granted Advantage Mortgage a secured interest in the Marcuzzos' residential property located in Sarpy County, Nebraska. The deed of trust was duly recorded in the office of the Sarpy County register of deeds.

The note executed in the Marcuzzos' names was negotiated from Advantage Mortgage to Commercial Federal Bank (Commercial Federal). Wells Fargo purchased Commercial Federal's loan portfolio, including the note and deed of trust. Commercial Federal endorsed the note in blank and transferred possession of it to Wells Fargo in July 2005. Commercial Federal was acquired by Bank of the West.

[290 Neb. 812] On July 27, 2011, MERS, as nominee for Advantage Mortgage, assigned all of its rights, title, and interest in the deed of trust to Wells Fargo by a corporate assignment of deed of trust. The corporate assignment of deed of trust was recorded in the office of the Sarpy County register of deeds.

Wells Fargo has had possession of the note and deed of trust since it was delivered to it in July 2005. No other entity has claimed ownership of the note and deed of trust or has demanded payment. When the Marcuzzos made payment on their note, the payments were made to and received by Wells Fargo.

Foreclosure and Bankruptcy

In May 2011, the Marcuzzos instituted bankruptcy proceedings under chapter 7 of the U.S. Bankruptcy Code. The Marcuzzos identified Wells Fargo on their bankruptcy schedules as a creditor holding a secured claim on their residence.

The Marcuzzos also began to default on their mortgage loan payments in May 2011. Wells Fargo sent the Marcuzzos multiple notices of default and then accelerated the Marcuzzos' loan balance that was due. The notices provided the Marcuzzos with the opportunity to cure the default.

The Marcuzzos stated that they voluntarily decided to stop making payments until they received adequate answers from Wells Fargo in regard to claimed issues in the paperwork of their mortgage assignment. The Marcuzzos claimed that they are ready and able to pay the past due principal and interest amounts to the proper beneficiary of the loan.

After obtaining relief from the stay in the bankruptcy court, Wells Fargo instituted foreclosure proceedings against the Marcuzzos' residential property. In November 2011, Wells Fargo appointed a successor trustee, Knapstein, in place of the original trustee, Courtney, by recording a substitution of trustee in the office of the Sarpy County register of deeds. Knapstein filed a notice of default in that office on November 9, 2011. Knapstein further sent a notice of default and letter of default to the Marcuzzos.

Notice of sale of the property was published in a local newspaper once a week for 5 weeks beginning on December [290 Neb. 813] 14, 2011, and ending on January 11, 2012. This notice provided that the sale was scheduled to take place on January 23. An agreement was reached between Wells Fargo and the Marcuzzos to postpone the sale of the property until February 7. At the sale on February 7, Fannie Mae was the highest bidder, and the property was sold to Fannie Mae for $196,350.47. Knapstein ...


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